Click here for the PDF: The Weekly Beacon – August 4 2023
We will be giving some macro economic market updates on a weekly basis. No equity recommendations will be given in this commentary, and we encourage you to contact us if you have questions regarding any observations.
Feel free to send in your pictures of lighthouses to be featured in our weekly commentary.
This weeks issue: Asset managers, ESG investing, Green investing, Blackrock, Fidelity, Home prices in the UK, British economy, China vs. the USA, New cold war, China economy, Fitch downgrades the U.S., Credit rating, U.S. Treasuries, U.S. government interest expense, Gold performance, Small cap stocks, P/E ratios, Uber, Uber earnings, Cash flows, Gold as a safe haven.
A moment for Uber
Uber, is one of the stocks that we used in this publication’s infancy to describe a company that destroyed shareholder value and burned through cash. In its early days, Uber burned through cash, yes, we know most companies do this, especially unicorns, but continued this trend even when trading on public markets. Uber IPO’d way back in 2019. The company had operated in a loss throughout its private market days and that continued in its public market days. The first quarter that Uber recorded a positive operating profit was the second quarter of this year. Yes, Uber finally reported an operating profit, and they reported that on Tuesday of this week.
After years of dilution, cash burning, and poor forecasting, we are proud to see Uber finally turning the corner to profitability. We appreciate the management team who realized profit and cash flows matter.
Although many technology investors labeled Uber as the future, the market did not reward the company’s stock price. Uber shares are only up 12% since their IPO price over 4 years ago.
At the start of this year, they were trading at 50% of their IPO price. Fast forward a few months and Uber shares have surged, and a profit was reported.
Uber reported an operating profit of $326 million last quarter. That number is quite interesting compared to its $95 billion market cap but it’s a start. According to Chatr, the company had built up almost $32 billion in operating losses since it was founded.
